There is no more margin for the global crop failure – 06/10/2021 – Commodities Shuttle

The world grain harvest has no more room for breakage. And corn is in the spotlight, being one of the main concerns. This is what data this Thursday (10) from Usda, Conab and IBGE show.

The United States Department of Agriculture pointed out that the end of the 2020/21 marketing period for the Americans, which takes place on August 31, will be with the lowest corn stocks since 2012/13, when there was a historic break caused by intense dry.

There will be 28.1 million tons, just 7.4% of the country’s consumption. In recent years, stocks at the end of the marketing year exceeded 50 million tons.

The dangerous reduction was due to the increase in exports, to 72.4 million tons, and the increase in the use of the cereal in the production of ethanol.

In the 2021/22 harvest, stocks will also remain tight, ending August 2022 at 34.5 million tons. This volume is enough for only 34 days of consumption.

In Brazil, the delay in planting and the current drought is harming corn productivity. The harvest, estimated at 108 million tons, in March, was revised and the expectation, for now, is 96 million, according to Conab (National Supply Company).

The IBGE (Brazilian Institute of Geography and Statistics) estimates Brazilian production at 99.2 million tons, a volume close to that of the USDA, which is 98.5 million.

In addition to Brazil and the United States, Argentina and Ukraine, two other important world producers, had their harvest reduced.

As a result, cereal prices are highly valued on the international market. One of the causes is sudden Chinese imports, which should continue in the next harvest.

The American production, which was 360 million tons in the 2020/21 harvest, is expected to reach 381 million in the next. This volume, however, depends on an area review that will be carried out by USDA later this month.

Corn has an adjusted world picture. World production and consumption will reach 1.19 billion tons in the 2021/22 harvest. In the previous one, consumption exceeded production by 2.2%.

As for soy, there is no big news in the numbers in Brazil, whose production is between 136 million and 137 million tons. The American, which was 112.5 million in 2020/21, is expected to rise to 120 million in the next. There is a concern in the market, however, with the drought in the main production areas of the Midwest.

A drop in the US crop will further affect international prices, as US stocks for this and next year are among the lowest in the country’s history.

As of August 31 this year, the United States, the second largest soybean producer in the world, will have only 3.7 million tons of soybeans. In the same period of 2022, there will be 4.2 million. These volumes are enough for only 11 and 13 days of consumption, respectively, according to AgRural.

The adverse weather effect on crops in several countries and low stocks keep agricultural commodity prices high on the main trading exchanges.

The price scenario will only get better defined with the progress of the harvests. In addition, the presence of funds, always in search of better profitability, also influence the pace of prices.

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